Friday, March 23, 2012

Fallen Aussie tycoon and FBI's net-bet supergrass to star in US trial - 21st March 2012...

Daniel Tzvetkoff, the one-time high-flying Queensland internet whiz who brought down America's multibillion-dollar online poker industry, will come out of hiding next month.

The 29-year-old faced a sentence of 75 years in a US federal prison but in 2010, while languishing in a New York jail, he struck a secret deal with prosecutors and has become a star informant for the US government in its bid to prosecute the kingpins of three of the world's largest online gambling companies: PokerStars, Full Tilt Poker and Absolute Poker.

AAP can reveal that Tzvetkoff, whose Queensland-based company Intabill allegedly processed more than $US1 billion ($957 million) worth of illegal transactions between US gamblers and internet gaming websites based offshore, has handed more than 90,000 documents over to prosecutors.

The inside information includes confidential emails.

Tzvetkoff's first public test as a prosecution witness will come on April 9 in a New York courtroom when a former Las Vegas-based business partner, Chad Elie, and a Utah banker, John Campos, go on trial.

Elie, 31, is charged with nine offences including conspiring to commit bank fraud and money laundering and faces a maximum jail sentence of 85 years if convicted.

Campos, a 57-year-old executive at Utah's SunFirst Bank who allegedly agreed to process gambling transactions, is charged with six offences and could be jailed for 35 years.

This week, Elie's lawyers complained to the judge handling the case that, on the eve of the trial, prosecutors dumped a "mountain of documents" on them, including Tzvetkoff's emails.

"For example, although the government had previously produced emails for Daniel Tzvetkoff, one of the government's main witnesses in this case, the material we recently received revealed that Mr Tzvetkoff had deleted his emails from the Intabill server, which had previously been made available to the defence, and that the Tzvetkoff emails that were included in prior productions were therefore ones that Mr Tzvetkoff had cherry-picked for the government," Monday's filing from Elie's lawyers, Barry Berke and Dani James, stated.

"Only after we pointed this out to the government did we receive a full set of Mr Tzvetkoff's materials, which included more than 90,000 documents and which we were able to access for the first time only yesterday."

Tzvetkoff was once a media darling in Australia, flaunting his wealth - estimated at $82 million just a few years ago - with a $27 million home on the Gold Coast, a garage filled with Lamborghinis and Ferraris, and as a sponsor of V8 Supercar racing team, Team IntaRacing.

His world came crashing down in 2009 when the internet poker companies, for which he allegedly helped launder $US1 billion, accused him of stealing about $US100 million.

Tzvetkoff was arrested at Las Vegas's upmarket Encore casino in April 2010 and charged with money laundering, bank fraud and other charges.

US federal prosecutors vigorously fought to keep Tzvetkoff in jail after his arrest, including successfully overturning a Las Vegas judge's decision to grant Tzvetkoff bail.

Tzvetkoff was transferred to a New York jail and sat there until June 2010 but, in secret dealings, sealed by judges, Tzvetkoff disappeared.

"He's turned the corner, seen the light and is co-operating," former FBI agent Harold Copus, after reviewing the details of the case, told AAP.

On April 15, 2011, Tzvetkoff's inside knowledge led to what has been dubbed in the US as "Black Friday", the day tens of thousands of US poker players logged on to their computers and discovered three top gambling sites - PokerStars, Full Tilt Poker and Absolute Poker - had been shut down in the US by authorities.

The FBI and prosecutors also announced that day internet gambling kingpins Isai Scheinberg and Paul Tate of PokerStars, Raymond Bitar and Nelson Burtnick of Full Tilt Poker, and Scott Tom and Brent Beckley of Absolute Poker, were charged with bank fraud, money laundering and illegal gambling offences.

Elie and Campos were also charged in the sweep.

Prosecutors alleged Elie, as Tzvetkoff's Intabill was crumbling in 2009, fleeced $US4 million from PokerStars.

"Intabill's founder, Daniel Tzvetkoff, who processed over $US1 billion for the poker companies, ended up owing tens of millions to PokerStars," prosecutor Arlo Deviln-Brown wrote in a recent court filing.

"While Tzvetkoff's lifestyle is squarely responsible for much of the missing money ($US25 million on a house, for example), the fact is that 'sub-processors' that Tzvetkoff relied on - including Elie - also failed to remit and indeed simply made off with the money PokerStars was missing." (AAP)

Auckland High Court grants Kim Dotcom $46,700 a month expenses...

A NEW Zealand court has granted Megaupload boss Kim Dotcom $46,700 a month in living expenses as he awaits a US bid to extradite him on online piracy charges.

The German national reportedly applied for $171,240 a month to cover his costs when he was freed on bail last month, including funds to pay for luxuries such as a butler and nannies.

The High Court in Auckland ruled Dotcom, who US authorities allege violated piracy laws to the tune of hundreds of millions of dollars, could have $46,700 a month, Fairfax Media reported.

It also gave the internet tycoon - a keen car enthusiast - access to a 2011 Mercedes Benz, The New Zealand Herald reported.

The 38-year-old's assets were frozen after New Zealand police, cooperating with a major US probe, raided his sprawling Auckland mansion on January 20, seizing artworks and luxury cars including a pink Cadillac.

Megaupload was founded in 2005 but shut down in January after the Auckland raid.

A US application for Dotcom's extradition is expected to be heard on August 20. US authorities have said they will seek the maximum penalty of 20 years in jail if he is brought before an American court.

Dotcom, who legally changed his name from Kim Schmitz, has denied any wrongdoing and vowed to fight extradition, labelling the case against him "misleading and malicious."

Casino rewards cards examined in hunt for cheats...

CASINO rewards cards could be the next secret weapon used by Centrelink and the Australian Taxation Office to take down frauds and welfare cheats.

The Absolute Rewards program, which is available through Queensland's three major casinos, is being considered by investigators as a way to nab dodgy individuals suspected of breaking the law.

Absolute Rewards allows members through its Absolute Assist function to set a daily gambling limit of their choice and tracks their spending to ensure machines lock users out when their limit is reached.

A Treasury Casino spokeswoman confirmed members were able to ask for summaries of their spending history.

By cross-referencing the spending with other documents, investigators could potentially determine whether fraud had taken place.

Section 264 of the Income Tax Assessment Act 1936 allows officers to obtain documents or data they require to further their probe.

An ATO spokeswoman said the office "would not rule out" using Absolute Rewards and Absolute Assist information to investigate targets.

"From time to time, we do use our powers under S264 to obtain information on individuals from third parties (such as casinos and other businesses) which may assist us to identify undisclosed income," she said.

"We would not rule out the possibility of using such a system to access information in the future."

Centrelink may also begin using rewards cards to track down welfare cheats.

Department of Human Services general manager Hank Jongen said while information hadn't so far been obtained through the system, it was a possibility.

"Based on the available information, the department would only seek to access details through the Absolute Assist program on an individual basis during an investigation into a customer's undisclosed wealth," he said.

A Treasury Casino spokeswoman said the casino had provided government agencies with information at their request.

Queensland Council for Civil Liberties president Michael Cope said he couldn't foresee any privacy issues provided the method was used only to investigate those already under suspicion. (News Limited)

Sports betting growing gambling...

The Aussie tradition of taking a punt is reaching new heights with online gambling leading to an explosion in sports betting.

Although still dwarfed by other forms of gambling, sports betting is gaining popularity, according to industry research group IBISWorld.

Sports betting was the fastest growing market segment, with annual growth of 14.7 per cent for the last five years.

IBISWorld Australian general manager Karen Dobie said sports betters were mostly young, single professionals with disposable income. They did not view it as a serious form of gambling.

'Sports betting is most accessible online. Given this demographic is particularly comfortable in the online environment, this is another factor driving growth,' Ms Dobie said in a statement on Wednesday.

The diversity of bets on offer, including who leads at half time and shoots the first goal was also driving spending.

Despite its rising popularity, sports betting accounts for only 1.6 per cent, or $360.5 million, of gambling spend.

Casino gambling accounts for 20 per cent of total expenditure, the research found.

Pokies, lotteries and racing were in decline, but pokies still took the lion's share of the market with 60.2 per cent.

Australians are among the most prolific gamblers in the world with the research predicting gambling expenditure to reach $22.5 billion or an average of $1,256 per person in 2011/12.

'More than 70 per cent of us have a flutter at least once a year, especially in line with key cultural events such as Anzac Day and the Melbourne Cup,' Ms Dobie said.

NSW had the most gamblers, making up 38 per cent of gambling spending, followed by Victoria and Queensland.

bwin.party sells Ongame to Shuffle Master - 6th March 2012...

bwin.party digital entertainment has agreed to sell Ongame, its business-to-business online poker network, to Shuffle Master for up to €29.5m.

bwin.party says the agreement is consistent with the group's stated strategy and follows its announced intention to sell Ongame last June.

An initial consideration of €19.5m is payable in cash on completion, subject to a post-completion working capital adjustment.

A further consideration of up to €10.0m payable in cash in the event that regulated online poker starts in the United States on either a federal or intra-state basis within five years from completion.